John Rubino: Gold, Silver, Miners — How to Invest with Global Financial System in Crisis

‘Gold is a big deal and it’s becoming a bigger deal — and that’s because it is real money,’ he said, noting that the yellow metal has been used as a store of value and a currency for thousands of years.

‘With that kind of history, you can say with some degree of certainty that the next time we screw up the financial system, gold will behave the way it’s always behaved — a lot of capital will flow into it, its price in local currency terms will go up and it’ll protect people’s purchasing power,’ Rubino explained during the conversation.

In his view, a recession probably should have happened in the US a few years ago. However, during the pandemic many people built up excess savings as the government issued stimulus checks, and that money has kept a downturn at bay.

Now, said Rubino, that’s changing. People have spent their excess savings, and are borrowing, even using credit cards to pay for necessities like gas and rent. Eventually consumer spending will take a hit, as will the US economy. At the same time, the US government has borrowed huge amounts of money and must now deal with the interest cost on its debt.

‘We should expect a recession and equities bear market. And then a government bailout of basically everybody in sight,’ said Rubino. ‘The question becomes: Is it possible for the world’s governments that are already this deeply indebted to bail out their banking systems and their pension funds, and their insurance companies and their real estate sectors?’

He believes there’s a ‘decent chance’ that it won’t be doable, and he’s looking to gold and silver, as well as energy assets, for protection. More sophisticated investors may also want to consider shorting the stock market.

‘I think there’s a very good chance with all the volatility that’s coming that people who time this right don’t just ride it out, they actually make a lot of money,’ Rubino said. Watch the interview above for his full thoughts.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.